Repo
for the q
Record sa Normalise Production Total cash All-in-sust All-in-cost AngloGold Prioritising Net debt r Significan Operating revi Gold Produced Sold Price receiv All-in susta All-in costs Total cash Financial revie Gold income Cost of sales Total cash costs Production cost Adjusted gross Gross profit Profit (loss) attrHeadline earnin
Adjusted headli
Net cash flow fr Capital expendi Notes: 1. Re 2. Re 3. Re 4. Re end Certain statements expectations regard prospects and outlo operations of certain capital expenditures statements regardin uncertainties and o achievements expre forecasts are reason looking statements a regulatory environm proceedings, and b 31 December 2013, could cause AngloG adverse effects on f publicly or release a the extent required cautionary statemen This communication GAAP financial mea prepared in accorda information that is im Investors should vis
ort
quarter a
afety measures a ed AHE of $66m, n of 1.128Moz ah h costs of $820/o taining costs imp ts improve 19% y d Ashanti genera g self-help measu reduced to $2,95 t maiden resourc ew ved 1 aining costs 2 2 costs 3 ew s 3 ts4 profit 5 ributable to equity ngs (loss)ine earnings (los
rom operating ac iture
fer to note C fer to note D "Non-fer to note E “Non-fer to note 3 of note ded 30 September
contained in this doc ing gold prices, produ ook of AngloGold Ash
n of AngloGold Ashan s and the outcome a ng AngloGold Ashant other factors that ma essed or implied in t nable, no assurance as a result of, among ment and other gover business and operati which was filed with Gold Ashanti’s actual r future results. Conse any revisions to these by applicable law. A nts herein. n may contain certain asures should be view ance with IFRS. In ad mportant to investors o
it this website to obta
and nine
across all metrics or 16 US cents head of guidance oz were better tha prove by 10% yea year-on-year to $ ates modest free ures to deleverag 52m; Net debt: ad ce declared at Nu y shareholders ss) 6 ctivities -GAAP disclosure" -GAAP disclosure" GAAP disclosure” f es for the quarter a
2014.
cument, other than st uction, cash costs, al hanti’s operations, ind nti’s exploration and p and consequence of a
ti’s operations, econo ay cause AngloGold these forward-looking can be given that su g other factors, chang rnment actions, inclu onal risk manageme the United States Se results to differ materi quently, readers are e forward-looking stat ll subsequent written “Non-GAAP” financia wed in addition to, an
dition, the presentatio on the main page of it in important informati
months
s; Industry-leadin a share on stron e; Up 8% year-on an guidance of $ ar-on-year to $1, $1,144/ozcash flow after s ge balance shee djusted EBITDA i uevo Chaquiro d - oz (000) - oz (000) - $/oz - $/oz - $/oz - $/oz - $m - $m - $m - $m - $m - $m - $m - cents/share - $m - cents/share - $m - cents/share - $m - $m for the definition. for the definition. for the definition. nd nine months
tatements of historica l-in sustaining costs, ividually or in the agg production projects an any potential or pend omic performance and Ashanti’s actual res g statements. Althoug ch expectations will p ges in economic, soc uding environmental a ent. For a discussion curities and Exchange ially from those expre
cautioned not to plac ements to reflect eve or oral forward-looki al measures. AngloG d not as an alternativ on of these measures ts website at www.an on about AngloGold A
ended 3
ng 2nd consecutiv ng production, de n-year and 3% o $850/oz - $890/oz 036/oz on strong strong operating et improves margin deposit in Colomb ended Sep 2014 1,128 1,101 1,281 1,036 1,144 820 1,295 (1,052) 864 877 243 273 41 10 44 11 2 0 320 261 5. 6. $ r Roal fact, including, with all-in costs, cost savi gregate, including the nd the completion of a ding litigation or regu d financial condition. sults, performance o gh AngloGold Ashan prove to have been c cial and political and m
approvals, fluctuation n of such risk factor
e Commission (“SEC essed in any forward-l ce undue reliance on ents or circumstances ing statements attribu Gold Ashanti utilises ce ve for, the reported op s may not be compara glogoldashanti.com a Ashanti.
30 Septem
ve fatality-free qu espite lower gold on prior quarter z g cost manageme quarter nally to 1.64 time bia Quarter ended Jun 2014 US 1,098 1,088 1,289 1,060 1,192 836 1,321 (1,064) 874 894 257 252 (80) (20) (89) (22) (4) (1) 336 311 Refer to note B Refer to note A represents US dolla ounding of figures m
hout limitation, those ngs and other operat e achievement of proj acquisitions and dispo ulatory proceedings o These forward-lookin or achievements to d ti believes that the e correct. Accordingly, r market conditions, the ns in gold prices and rs, refer to AngloGol C”) on 14 April 2014. T looking statements. O forward-looking state s after the date hereo
utable to AngloGold A ertain Non-GAAP per perating results or ca able to similarly titled and under the “Investo
Quar
mber 201
arter price ent s ended Sep 2013 S dollar / Imperia 1,043 1,062 1,327 1,155 1,408 809 1,374 (1,064) 815 865 310 276 1 0 (18) (5) 576 148 319 448 "Non-GAAP disclos "Non-GAAP disclos ar, unless otherwise may result in compuconcerning the econo ing results, return on ect milestones, comm ositions, AngloGold As or environmental heal
ng statements or fore differ materially from expectations reflected results could differ ma e success of business d exchange rates, th
d Ashanti’s annual r These factors are not Other unknown or unp ements. AngloGold A f or to reflect the occu Ashanti or any perso rformance measures sh flow from operatio measures other com ors” tab on the main p
rter 3 2
14
Nine m ended Sep 2014 al 3,280 3,286 1,287 1,030 1,150 810 3,940 (3,130) 2,516 2,578 811 820 - 0 (7) (2) 117 29 1,007 846sure" for the definiti sure" for the definiti e stated. utational discrepanc
omic outlook for the equity, productivity im mencement and com Ashanti’s liquidity and lth and safety issues ecasts involve known m the anticipated res d in such forward-loo aterially from those s ss and operating initia he outcome of pendi report on Form 20-F necessarily all of the predictable factors cou Ashanti undertakes no currence of unanticipa on acting on its behal and ratios in managi ons or any other mea mpanies may use. Ang
page. This information
2014
onths ended Sep 2013 2,876 2,902 1,455 1,239 1,562 865 4,079 (3,104) 2,436 2,518 975 1,041 (1,925) (496) 354 91 553 142 815 1,516 ion. ion. cies.gold mining industry mprovements, growth pletion of commercia capital resources and s, are forward-looking n and unknown risks sults, performance or oking statements and set out in the forward-atives, changes in the ng or future litigation F for the year ended important factors that uld also have materia o obligation to update ated events, except to lf are qualified by the ng its business. Non-sures of performance gloGold Ashanti posts n is updated regularly , h l d g , r d -e n d t l e o e -e s .
Operations
at a glance
for the quarter ended 30 September 2014
oz (000) Year-on-year % Variance 4 Qtr on Qtr % Variance 5 $/oz Year-on-year % Variance 4 Qtr on Qtr % Variance 5 $/oz Year-on-year % Variance 4 Qtr on Qtr % Variance 5 $m Year-on-year $m Variance 4 Qtr on Qtr $m Variance 5 SOUTH AFRICA 314 (5) (2) 1,115 (2) 5 902 6 5 47 (29) (11)
Vaal River Operations 107 (12) (11) 1,153 (5) 11 940 8 7 10 (14) (11)
Great Noligwa 17 - (23) 1,343 (11) 11 1,276 (2) 20 (2) 1 (4)
Kopanang 38 (14) (5) 1,211 (5) 2 993 3 (3) (1) (4)
Moab Khotsong 52 (13) (12) 1,047 (3) 19 792 18 12 13 (11) (7)
West Wits Operations 153 3 6 1,007 (11) - 825 1 4 35 (2)
Mponeng 92 5 5 898 (17) (3) 688 (9) (4) 35 6 5
TauTona 61 - 9 1,170 (3) 3 1,030 15 12 - (9) (5)
Total Surface Operations 52 (12) (5) 1,261 27 - 1,048 15 3 2 (13)
First Uranium SA 23 (12) - 1,308 39 (18) 954 20 (9) (2) (5) 4 Surface Operations 29 (12) (9) 1,223 19 19 1,123 11 13 4 (7) (4) Technology 2 100 100 - - - - - - - - -INTERNATIONAL OPERATIONS 813 14 4 973 (13) (6) 789 - (4) 215 (18) 11 CONTINENTAL AFRICA 410 7 4 928 (19) (7) 799 (1) (6) 116 (14) 3 DRC Kibali - Attr. 45% 6 65 100 59 580 100 (21) 563 100 (21) 27 27 23 Ghana Iduapriem 45 (27) (4) 984 55 (1) 866 49 (5) 10 (26) Obuasi 78 15 22 1,169 (39) (18) 966 (11) (18) 15 23 12 Guinea Siguiri - Attr. 85% 72 4 (10) 798 (23) (13) 741 (25) (5) 28 5 (6) Mali Morila - Attr. 40% 6 10 (17) - 1,660 44 42 1,525 101 34 (6) (13) (5) Sadiola - Attr. 41% 6 21 5 (9) 1,062 (47) (1) 981 (44) 3 - 8 (1) Yatela - Attr. 40% 6 2 (60) - 1,858 25 (34) 1,672 18 (13) (1) - 3 Namibia Navachab - (100) (100) - (100) (100) - (100) (100) - (15) (9) Tanzania Geita 116 (9) 5 907 (1) 3 715 30 7 39 (28) (13) Non-controlling interests, exploration and other 4 4 (2)
AUSTRALASIA 152 145 (2) 980 (38) (6) 861 (32) 1 24 35 2
Australia Sunrise Dam 68 10 10 1,116 (9) (27) 982 (17) (25) 6 10 22
Tropicana - Attr. 70% 84 100 (10) 800 100 16 721 100 45 23 23 (21)
Exploration and other (5) 2 1
AMERICAS 251 (7) 10 1,035 8 (4) 730 11 (5) 76 (38) 8
Argentina Cerro Vanguardia - Attr. 92.50% 62 (2) - 956 16 2 656 7 (4) 20 (14) (3)
Brazil AngloGold Ashanti Mineração 101 (2) 15 1,037 4 (1) 699 16 (3) 34 (3) 3
Serra Grande 32 (9) 7 1,097 12 (9) 803 13 (9) 3 (10) 2
United States of America Cripple Creek & Victor 56 (19) 14 1,075 7 (12) 827 11 (8) 18 (11) 7
Non-controlling interests, exploration and other 1 (1) (1)
OTHER - 2 4
Sub-total 1,128 8 3 1,036 (10) (2) 820 1 (2) 262 (45) 5
Equity accounted investments included above (19) (22) (19)
AngloGold Ashanti 243 (67) (14) 1 Refer to note D under "Non-GAAP disclosure" for definition
2
Refer to note E under "Non-GAAP disclosure" for definition 3
Refer to note B under "Non-GAAP disclosure" for definition 4
Variance September 2014 quarter on September 2013 quarter - increase (decrease). 5
Variance September 2014 quarter on June 2014 quarter - increase (decrease). 6
Equity accounted joint ventures.
Rounding of figures may result in computational discrepancies.
Production Total cash costs 2 Adjusted
gross profit (loss) 3
Financial and Operating Report
OVERVIEW FOR THE QUARTER
AngloGold Ashanti again maintained its strong momentum in achieving its five key business objectives, namely: improving safety and sustainability; enhancing financial flexibility; optimising overhead and operating costs and capital expenditure; improving the quality of its portfolio; and maintaining long-term optionality in the business.
Importantly, progress made on those areas again supported the key objective of sustainably improving free cash flow. Despite a 3% decline in the average gold price received from a year earlier to $1,281/oz, an improved production performance and lower all-in sustaining costs, helped drive net debt marginally lower to $2,952 million, from $3,008 million a year earlier and $2,994 million the previous quarter.
Another strong operating performance across each of the company’s operating regions helped an 8% improvement in output year-on-year to 1.128Moz, ahead of guidance levels of 1.06Moz to 1.09Moz. This performance came despite the loss of 30,000oz related to the earthquake on 5 August that interrupted the Vaal River Operations in South Africa for several days while the mines were idled to allow aftershocks to subside and repairs to be affected.
All-in sustaining costs (AISC) were $1,036/oz, 10% lower than the same period last year of $1,155/oz. Total cash costs of $820/oz were marginally higher at 1% compared to $809/oz recorded in the same quarter last year, and were better than guidance of $850/oz to $890/oz, despite ongoing inflationary challenges in several key jurisdictions including South Africa, Continental Africa and South America. Corporate and marketing costs of $24m were 43% lower year-on-year, while exploration and evaluation costs of $37m were 33% lower over that period. The improved performance reflected the benefit of a full quarter with Kibali and Tropicana in the operating line-up, as well as an ongoing focus on overhead- and direct-cost management through the Project 500 programme, continued capital discipline and the benefit of weaker currencies against the US dollar in Brazil, South Africa and Australia.
These strong fundamental improvements once again helped offset the lower gold price, helping to maintain cash flow from operating activities compared to the same period last year. Adjusted Earnings Before Interest Depreciation and Amortisation (adjusted EBITDA) increased to $400m from $327m in the third quarter of 2013, reflecting an improvement in the adjusted EBITDA margin from 24% a year ago, to the current 31%. The key ratio of net debt to adjusted EBITDA improved to 1.64 times for the twelve month period ended 30 September 2014, from 2.02 times for the twelve month period ended 30 September 2013, and 1.73 times for the twelve month period ending 30 June 2014.
Once again, this significant improvement in operating performance was made alongside another record safety performance. AngloGold Ashanti recorded its second fatality-free quarter in succession, the first time in the company’s history that this has been achieved. In addition, all other safety metrics reached their best levels ever, an achievement all the more noteworthy given the potential dangers posed by the earthquake. In the event, all 3,300 employees working underground at the time were safely lifted to surface, with only a handful of minor injuries reported.
Summary table comparing 2014 performance to date with the same periods last year:
Q3 2014
Q3 2013
Improved
Q14 vs
Q13
YTD Sep
2014
YTD Sep
2013
Improved
YTD vs
YTD
Gold price received ($/oz)
1,281
1,327
(3%) 1,287 1,455 (12%)
Gold Production (koz)
1,128
1,043
8% 3,280 2,876 14%
Total cash costs ($/oz)
820
809
1% 810 865 (6%)
Corporate and marketing costs* ($m)
24
42
(43%) 68 165 (59%)
Exploration and evaluation costs ($m)
37
55
(33%) 99 214 (54%)
Capital expenditure ($m)
261
448
(42%) 846 1,516 (44%)
All-in sustaining costs**($/oz)
1,036 1,155 (10%) 1,030 1,239 (17%)
All-in costs**($/oz)
1,144 1,408 (19%) 1,150 1,562 (26%)
Cash inflow from operating activities ($m)
320 319 0% 1,007 815 24%
Adjusted EBITDA ($m)
400
327
22% 1,258 1,123 12%
Free cash flow ($m)
30
(222)
114% 86 (950) 109%
*
including administration and other expenses.
CORPORATE UPDATE
“Our operations are firing on all cylinders,” Chief Executive Officer Srinivasan Venkatakrishnan, said. “We’ve prioritised and have started working on a range of self-help measures to generate cash from within current operating base to further deleverage the balance sheet over the medium term. We will also consider the sale or partnership of an operating asset, if required.”
On 10 September 2014, AngloGold Ashanti announced, for consultation with its shareholders, a proposed corporate restructuring and capital raising. The restructuring proposed creating a London-listed entity to house the company’s international assets with the South African assets remaining at AngloGold Ashanti, thus creating two simpler and more focused entities. The proposed capital raising would have reduced debt levels in order to leave the South African entity debt free (with the exception of existing guarantees by Anglogold Ashanti of debt that would have remained outstanding) and leave the international entity with sustainable debt levels that could be supported by its own cash flows.
This proposal was withdrawn on 15 September, after engagement with holders of the majority of the shares in the company. While there was broad support for the strategic logic of the restructuring, a number of shareholders expressed concerns about certain aspects of the proposed transactions, in particular the quantum of the equity capital raising needed to enable the restructuring to be implemented in accordance with regulatory and other requirements.
The withdrawal of the restructuring proposal means there is no need for the quantum of deleveraging, required to facilitate the separation of the company. Furthermore, maturities of AngloGold Ashanti’s major debt facilities are long-dated, with revolving credit facilities – most of which are currently undrawn -- maturing only in 2019, and the first bond maturities a year later, in 2020. Net debt to adjusted EBITDA at current levels of about 1.6 times is well within covenant limits of 3.5 times. In addition, the continued restructuring of the company’s cost base and improvements in the quality of the portfolio, have helped the company deliver modest free cash generation in each of the last three quarters, despite the lower gold price. Liquidity is currently adequate with cash available, access to commercial paper markets and the undrawn portions of the company’s bank facilities ($1bn in US dollar RCF and roughly A$151m undrawn in our Australian dollar RCF).
While pro-actively reducing current debt levels and improving overall balance sheet flexibility remain important objectives for management in the medium term, AngloGold Ashanti has intensified its focus on prioritising value creation opportunities deliverable from within its current structure. The company plans to continue to aggressively identify and implement further operational efficiencies, reduce overhead cost structures and pursue other initiatives to improve underlying business performance.
The company also intends to explore other opportunities to strengthen its balance sheet including portfolio simplification, sale or the entry into partnerships with respect to its Colombian portfolio and Obuasi mine in Ghana and, could potentially consider the sale or joint venture of other operating assets for fair value. AngloGold Ashanti’s medium-term aspirational target would be to prioritise the use of proceeds from such actions to reduce debt by about $1bn over the medium-term in order to lower its leverage ratio to less than 1.5 times net debt to adjusted EBITDA.
SAFETY
For the first time ever, AngloGold Ashanti reported two consecutive quarters without a single workplace fatality. This is a significant achievement for a South African deep-level mining major, and shows what is possible when total commitment by a group of people comes together with the correct culture, procedures and support. AngloGold Ashanti’s overall workplace safety continues to show strong improvement across several metrics, with the broadest measure of progress – all injury frequency rates and lost-time injury frequency rates – remaining at record low levels. Seven of our operating and major exploration sites have now passed nine months without a single lost time injury, while continued improvements at several other operations have allowed new safety benchmarks to be set.
Ongoing process, management and behavioural improvements have helped more than halve the number of safety incidents since 2007. While we are immensely proud of this achievement, which is the result of hard work over several years, we fully realise that there is no room for complacency while injuries occur on mine sites. We recognise, however, that to the end of September 2014 our record of no fatalities related to so-called ‘fall-of-ground’ incidents continued for more than a year as at the quarter end. In addition, nine of our operating entities ended the quarter with no lost time injuries and six have that record intact for the first nine months of the year. We continue to look for new ways to keep safety at the forefront of everything we do and continue to focus on managing our major hazards, and understanding what we call ‘high potential incidents,’ which may have resulted in death or serious injury.
FINANCIAL AND CORPORATE REVIEW
Cash inflow from operating activities of $320m for the three months to 30 September 2014 was similar to the $319m of the same quarter in 2013, despite the lower gold price received. Free cash flow of $30m after all expenditures, compared to the total outflow of $222m in the period a year ago, highlighting significant operating and cost improvements across a broad front.
Adjusted headline earnings (AHE) were $2m in the three months to 30 September 2014, compared with $576m or 148 US cents per share a year earlier, when AHE reflected a $567m realised fair value gain on a three-year convertible bond. The $2m AHE for the quarter under review reflects fees related to the accelerated amortisation of the US$ and A$ RCF ($7m), operational and corporate redundancies ($36m), operational closure and termination costs ($7m), non-cash provisions relating to stockpiles and consumable inventories ($6m) and indirect taxes and legal provisions ($8m).
By removing the impact of the above adjustments the normalised AHE for the period, therefore, would be $66m, or 16 US cents a share, based on the weighted average number of shares of 406 million compared with $110m or 28 cents in the corresponding quarter of 2013. This was due to a lower gold price, annual inflationary increases, higher amortisation and taxation due to more withholding taxes on non-recurring taxation credits partially offset by weaker local currencies, savings in corporate and exploration expenditure and lower finance costs. The normalised AHE for the September 2014 quarter is lower than June 2014 quarter at $76m or 19 cents per share, mainly impacted by cost inflationary increases, notably the South African wage increases and winter power tariffs.
Net profit (loss) attributable to equity shareholders for the third quarter of 2014 was $41m, compared to $1m a year earlier.
Operational performance for the third quarter was strong with both production and costs coming in better than market guidance. Production was 1.128Moz at an average total cash cost of $820/oz, compared to 1.043Moz at $809/oz a year earlier and 1.098Moz at $836/oz the previous quarter. Guidance for the third quarter was 1.06Moz to 1.09Moz oz at a total cash cost of $850-890/oz. This included a 30,000oz loss of production at our Vaal River Operations due to the earthquake. Costs overall benefited from higher output, weaker currencies and continued benefits from a range of cost saving initiatives.
Production from the South African operations fell by 5% to 314,000oz in the third quarter of 2014, due to the impact of the earthquake. During the third quarter of 2014 production from the International Operations increased 14% to 813,000oz from 714,000oz in the third quarter of 2013, despite no contribution from Navachab following its sale in June 2014, and the continued wind-down of production from Obuasi. Within the international portfolio, Continental Africa was 7% higher at 410,000oz for the third quarter of 2014, compared to 383,000oz in the third quarter of 2013. Year-on-year, Australia more than doubled from 62,000oz to 152,000oz following the addition of Tropicana, while the Americas dropped marginally to 251,000oz from 270,000oz , due mainly to declines in production from the Cripple Creek & Victor mine.
All-in sustaining costs (AISC), excluding stockpile write offs, were $1,036/oz, a 10% improvement year-on-year, and 2% lower than the previous quarter due to lower total cash costs and an increase in gold sold. The year-on-year decline in AISC was due to the higher ounces sold, lower corporate and exploration costs as well as lower sustaining capital expenditure. Total cash costs for the third quarter of 2014 increased $11/oz compared to the same period in the previous year, from $809/oz to $820/oz. The higher total cash costs, given the two new mines – Kibali and Tropicana -- include fuel and power costs and service costs, partly offset by significant improvements from a combination of cost saving initiatives, currency weakness, removal of some marginal and loss-making production and higher output in some areas. Total capital expenditure during the third quarter was $261m (including equity accounted joint ventures), compared with $448m in the third quarter of 2013 and $311m the previous quarter. Of the total capital spent, project capital expenditure during the quarter amounted to $84m. Free cash flow after all outgoing expenditures including interest and tax, improved from negative $222m a year earlier to a positive $30m in the third quarter, reflecting declining capital expenditures, improved costs and higher production.
At the end of the third quarter of 2014, net debt was $2,952m compared to $3,008m a year earlier, and $2,994m in the second quarter, resulting in an improvement in net debt to adjusted EBITDA ratio to 1.64 times, compared with 1.73 times in the previous quarter and 2.02 times a year ago.
OPERATIONAL HIGHLIGHTS
The South African operations produced 314,000oz at a total cash cost of $902/oz during the third quarter of 2014 compared to 329,000oz at total cash cost of $851/oz in the third quarter of 2013. Production was adversely impacted by the 5.3 magnitude earthquake which struck South Africa’s North West province on the 5 August 2014, and the time taken in its aftermath to allow aftershocks to subside and then to effect repairs. Total cash costs increased due to labour inflationary increases and seasonal electricity tariffs that were effective from the second half of the year. However, these costs were partially offset by cost savings from Project 500 initiatives.
At West Wits, production was 153,000oz at total cash cost of $825/oz during the third quarter of 2014 compared to 149,000oz at total cash cost of $814/oz during the third quarter of 2013. The third quarter’s performance reflected an improvement on the back of seismic related activities and safety stoppages. Mponeng delivered a 5% improvement in production compared to the same quarter of 2013 as a result of a slight reduction in stope-widths and an increased overall grade due to lower intake of marginal ore tonnages. Despite annual inflationary increases, total cash costs decreased by 9% year-on-year. Mponeng was the lowest cost producer for the South African region at a total cash cost of $688/oz. The concerted effort at TauTona on value accretive energy initiatives continues to achieve encouraging results. These initiatives include wastage elimination, rescheduling activities such as pumping to take place during non-peak shift hours, continuous monitoring of water arrival and specific attention is given to identifying and repairing air leaks.
Production from the Vaal River operations decreased in the third quarter of 2014 to 107,000oz at total cash cost of $940/oz, compared to 122,000oz at total cash cost of $867/oz in the third quarter of 2013. Great Noligwa and Moab Khotsong were most severely impacted by the earthquake whilst Kopanang was impacted by safety related disruptions. Underground assessments indicated that some of the reef silos had cracked, while other relatively minor damage occurred to surface infrastructure and buildings. Overall, operations were impacted by between five and ten days of no or partial production, depending on the damage at each of the affected sites.
Total Surface Operations production for the third quarter of 2014 was 52,000oz at total cash cost of $1,048/oz, compared to 59,000oz
at total cash cost of $915/oz in the third quarter of 2013. Processing of marginal ore dump material at some reclamation sites was discontinued as grades were below cut-off. In mitigating this, an extensive drilling program was started at the reclamation sites to improve knowledge of mineralogy and grade. Current reagent dosage rates and metallurgical parameters are being optimised. Commissioning of the uranium plant at Mine Waste Solutions has commenced and is expected to be completed by year-end.
The Continental Africa region for the third quarter of 2014 produced 410,000oz at total cash cost of $799/oz compared to 382,000oz at total cash cost of $804/oz in the third quarter of 2013; the increase in production was mainly due to the contribution from Kibali.
In Ghana, Iduapriem’s production for the third quarter of 2014, was 45,000oz at total cash costs of $866/oz compared to 62,000oz at
total cash cost of $580/oz in third quarter of 2013. Production decreased in line with production plan which is focused on treating lower
grade stockpile material. At Obuasi, production for the third quarter of 2014 was 78,000oz at total cash cost of $966/oz, compared to
68,000oz at total cash cost of $1,082/oz in third quarter of 2013. Production increased and total cash costs improved due to an increase in tonnage throughput from both underground and surface sources.
In the Republic of Guinea, Siguiri’s production for the third quarter of 2014 was 72,000oz at total cash cost of $741/oz compared to
69,000oz at total cash costs of $987/oz in third quarter of 2013. Production improved despite depleting higher grade ore sources. Total cash costs decreased as a result of cost management through renegotiation of fuel supply contracts and other efficiency benefits.
In Mali, Morila’s production was down at 10,000oz at total cash costs of $1,525/oz. Costs increased as a result of a non-cash
gold-in-process inventory expense as the gold locked up in the plant in the previous period was released. Sadiola’s production was 21,000oz
at total cash cost of $981/oz as a result of a decrease in recovered grade due to lower volumes of oxide material accessed from the
primary ore sources. Yatela’s production was down to 2,000oz in line with the closure plan. Total cash costs were $1,672/oz.
In Tanzania, Geita’s production for the third quarter of 2014 was 116,000oz at total cash cost of $715/oz compared to 127,000oz at
total cash cost of $549/oz in third quarter of 2013. Production was lower as a result of a 19% decrease in recovered grade, partly offset
by a 14% increase in tonnage throughput, which also negatively impacted on costs. Production was higher in the third quarter of 2013 due to higher grade ore sourced from the Star & Comet pit which has now been depleted. Going forward, production is expected to improve as a result of increased tonnage throughput with the consistency in the mill running time and improved mill productivity from a softer ore blend delivered to the plant. The increase in total cash costs was in line with the annual operational plan as a result of higher mining costs incurred in the quarter. In addition, AngloGold Ashanti is investigating a move to switching Geita from an owner-operator model to a contractor operated model in the new year, to take advantage of a relatively attractive market for mining contracts and to improve ongoing cash flow by removing some future capital commitments.
In the Democratic Republic of the Congo, production in Kibali was 65,000oz at total cash costs of $563/oz. The 59% increase in
production over the previous quarter was due to successful efforts to overcome operational challenges encountered with the commissioning of the Sulphide Circuit, as well as plant availability on the Oxide Circuit. Production was also assisted by a 29% improvement in throughput and increased milled head grade.
The Americas region, for the third quarter of 2014, produced 251,000oz at total cash cost of $730/oz compared to 270,000oz at total cash cost of $656/oz in the third quarter of 2013.
In the United States, Cripple Creek & Victor’s production for the third quarter of 2014 was 56,000oz at total cash cost of $827/oz
compared to 69,000oz at total cash cost of $744/oz in the third quarter of 2013. Production decreased partially due to a change in the ore stacking plan. A delay in receiving certification for a section of an exposed liner led to the heap leach stacking plan being modified resulting in deferred production as ore was placed deeper in the leach pad in the first half of the year and shallower in the second half. In addition, production was negatively affected by lower ore-grade mined and fewer tonnes crushed due to more clay in the ore, thereby impacting negatively on total cash costs in addition to lower gold placement.
In Argentina, Cerro Vanguardia´s gold production for the third quarter of 2014 was 62,000oz at a total cash cost of $656/oz compared
to 63,000oz at total cash cost of $614/oz in the third quarter of 2013. Production was negatively impacted by operational delays in development causing decreased secondary development head grades and sequencing in the mine, thereby resulting in lower grade at the underground mine compensated by higher tonnes treated. Although costs benefited from the weaker exchange rate, this was offset by lower by-product sales and lower deferred stripping adjustment.
In Brazil, production for the third quarter of 2014 was 133,000oz at a total cash cost of $724/oz compared to 138,000oz at a total cash
cost of $629/oz in the third quarter of 2013. At AngloGold Ashanti Córrego do Sítio Mineração, production for the third quarter of
2014 was 101,000oz at total cash cost of $699/oz compared to 103,000oz at total cash cost of $602/oz in the third quarter of 2013. Production was impacted by operational delays in high grade areas, changes in mining plan at Cuiabá Complex, and geotechnical challenges at the new oxide pit. Work is underway to improve the mine’s rock mechanics, change the mining method from cut-and-fill to sub-level stoping and increase the contribution of Narrow Vein Ore Bodies (NV) from 15% of the mine’s total, to 40%.
Also at Cuiaba, our exploration programme, the deep-level exploration programme confirmed the down-plunge extension of the ore body as far as Level 24 at the MO mine (the Main Ore Body) and Level 26 at the NV mine, while high-grade quartz veins have been intersected between Level 9 and Level 25. In addition, satellite ore bodies have been intersected close to the existing infrastructure. These exploration successes will, potentially help add production in the both the short-term and over the life of mine.
At Serra Grande, production for the third quarter of 2014 was 32,000oz at total cash cost of $803/oz, compared to 35,000oz at total cash cost of $709/oz in the third quarter of 2013. Production was down due to lower grades caused by differences in underground mine sequencing, with higher grades anticipated in the latter part of the year. Costs were negatively impacted mainly by lower gold production, local currency appreciation and ore stockpiles.
In Australia production for the third quarter of 2014 was 152,000oz at total cash cost of $861/oz compared to 62,000oz at total cash cost
of $1,270/oz in the third quarter of 2013. At Sunrise Dam production for the third quarter of 2014 was 68,000oz at total cash cost of
$982/oz compared to 62,000oz at total cash costs of $1,184/oz in third quarter of 2013. The increase in production was attributable to favourable mill throughput with a record 616,000 tonnes of underground ore mined during this quarter whilst the underground mine grade increased to 2.74g/t from the prior year’s quarter’s 2.20g/t. Total cash costs decreased due to the higher production as well as the drawdown of ore stockpiles. The mine successfully completed the transition to underground operations following the closure of the Open Pit.
Tropicana production for the third quarter of 2014 was 84,000oz at total cash cost of $721/oz compared to 93,000oz at total cash cost of $498/oz in the previous quarter. Production decreased quarter-on-quarter as a result of lower mined and milled grades in July and significant downtime in the mill for both planned maintenance and repairs. In addition, structural failure of the CIL Tank 7 (inter-tank screen) support tubes occurred, causing part of the tank wall to buckle. Mill throughput was constrained by reduced availability of process water during the quarter as a result of lower-than-expected production from the bore field. A number of new bores have been drilled and commissioned but approvals are required to enable the development of further bores that will provide redundancy through the hot summer months. Mining was also constrained while remediation of a wall slippage in the upper oxide zone in the Havana Pit was carried out.
TECHNOLOGY AND INNOVATION UPDATE:
The Technology Innovation Consortium continued to advance in the main projects targeting the methodology to Safely mine, All the Gold, Only the Gold, All the Time. During the third quarter of 2014, progress on key technologies that seek to establish the base for a safe, automated mining method intended for selective use at AngloGold Ashanti’s deep-level underground mining operations is as follows:
1. Reef Boring
TauTona mine – Test site:
Eleven holes were drilled during the quarter. Due to the change in reef channel width, the holes were drilled at different diameters ranging from 660mm up to 720mm. Improvement in the drilling theory remains a focus area and different reamer cutter configurations were tested. Due to the reef channel increasing, more holes will be drilled with the 660mm and 720mm reamers and further information obtained will evaluate the extent to which the reamers can be deployed at the prototype sites.
TauTona mine – Prototype sites
During the third quarter, the testing of three medium reef (width 40-80cm) Atlantis machines at 97 Level at the TauTona mine commenced. Industrial and mechanical engineering support is being supplied to improve machine performance to design expectations.
Great Noligwa mine
Testing started on the new HPE narrow reef (0-40cm) machine and nine holes have been drilled to date. This method of drilling requires a double pass drilling sequence where an initial pilot or direction hole is drilled which is followed by a larger diameter cutter that reams the initial hole to a larger dimension. Drilling of the 115mm pilot holes was successful with regards to drilling rate and direction. Reaming with 250mm and 350mm reamers however remains a challenge as the softer footwall conditions associated with the C-reef ground are causing the cutter head to fall out of the direction hole and into the non-gold bearing material below the reef. Modifications are now being assessed.
Site Equipping:
Site equipping of the 2014 prototype sites were completed. Work continues to equip future 2015 sites.
Machine Manufacturing:
All four medium reef (width 40-80cm) machines and the two small reef (width 0-40cm) machines have been manufactured and delivered to the relevant mines. The last of the medium reef machines (Moab Khotsong) as well as the small reef machines (Kopanang) have been delivered to both mines. Testing on these machines has started.
2. Ore body Knowledge and Exploration
Trial 5 was completed in the third quarter. Rotary Percussion (RP) drilling was compared to Reverence Circulation (RC) drilling, which was conducted during trials 1 to 4. A total of three holes were drilled with the average rate increasing from a previous 12.7m/hr to a new average of 13.3m/hr, with no improvement in the drilling accuracy. Trial 6 will continue in the last quarter of the year using the RC drilling method. The new compressor will lead to an increase in the operating air pressure which will in turn improve the drilling rate to greater depths. Additionally rod stabilisers will be tested to ensure better accuracy as this remains a critical part of concluding a successful drilling solution.
3. Ultra High Strength Backfill (UHSB)
Alterations were made to the underground UHSB plant installed at TauTona mine to enhance the efficiency of the system. All available reef bored holes in the prototype testing block and test site have been filled. A software data logging system was installed and commissioned in the prototype testing site as part of the on-going process to install instrumentation. The focus will now be to integrate and process the data from the instrumentation, which is installed in the backfilled holes to monitor the backfill and rock mass response. Installation of an acoustic monitoring system commenced to additionally monitor the rock mass response during drilling and will be tested during the last quarter of the year.
Civil engineering preparation work for the tailings drying plant commenced on surface at TauTona mine. The work is progressing as scheduled and the plant will be commissioned during the last quarter of the year. Surface testing to develop a pumping solution towards a 1,000m horizontal distance target is still in progress and work will continue into the next quarter.
PROJECT UPDATE
The CC&V mine life extension project (MLE2) includes a High Grade Mill and a new Valley Leach Facility and associated gold recovery plant. The High Grade Mill is 87% complete as of the end of the third quarter 2014 and is planned to complete construction and start production in the fourth quarter of 2014. All major mill equipment has been set in place and the remaining work is largely piping and electrical. The new Valley Leach facility and associated gold recovery plant are scheduled to start production in 2016.
In Kibali, the construction of the metallurgical facility was materially completed at the end of the third quarter of 2014 with only punching against agreed lists taking place. In respect of the hydropower projects, three of the four turbines at Nzoro2 are now consistently utilised within the operation’s power grid with hydropower utilisation improving during the quarter, although not yet at optimum levels. Construction of the second station, Ambarau, has commenced and is expected to be completed in 2015. The construction of the paste backfill plant is on schedule for completion and commissioning at the end of the first quarter in 2015. The development of the decline shaft system continued well during the quarter and remains ahead of plan with focus on the ventilation infrastructure and the completion of the main pump station.
The Resettlement Action Plan (RAP) of the Roman Catholic Church has been completed during the third quarter of 2014. A new moratorium was entered into with the Provincial Governor during the quarter, extending the current Exclusion Zone to include the Mofu and Gorumbwa deposits. A limited RAP will occur with affected families around the Mofu pit and is expected to be completed by the fourth quarter of 2014 whilst the Gorumbwa RAP is planned to be completed by the end of 2015.
Capital expenditure for the quarter amounted to $76.2 million and totals $291.1 million for the year to date (at 100%). The capital estimate for phases 1 and 2 of the project remains in line with previous guidance, with phase 1 expected to be completed by the end of the 2014 year.
At Obuasi, the decline project advanced 968m in the third quarter of 2014 with the total project advance of 6,311m. The decline is now at the 18Level, which equates to 1,800’ (or 600m) below surface, with a final project depth of 5,000’ (or 1,500m) below surface. Until August 2014, the decline was being advanced from multiple locations in order to speed up advance. This has worked very effectively and now that these headings have joined, the project has reduced to a single jumbo to focus on the development through to 26Level which will enable decline access to two main production blocks, i.e. Sansu 3 and Block 8Level.
The transition to the Limited Operating state as defined in the APMO (Amendment to the Programme of Mining Operations) continued, with the application submitted to Government in July and the planning is well advanced. Government requested an extension to mid-November to submit their comments. The Workforce strength as at the end of the third quarter 2014 was 2,723 and a phased retrenchment programme is continuing until the APMO approval is received. The Feasibility Study to support a business case for ongoing investment into Obuasi to transform the operation into a more modern, productive and cost effective operation is well advanced and expected to be completed early in 2015.
EXPLORATION
Total expensed exploration and evaluation costs (including technology) during the third quarter, inclusive of expenditure at equity accounted joint ventures, were $40m ($9m on Brownfield, $13m on Greenfield and $18m on pre-feasibility studies), compared to $77m during the same quarter the previous year.
GREENFIELDS EXPLORATION
During the third quarter of 2014, focussed Greenfields exploration activities were undertaken in Australia, Colombia and Guinea, while minor work was also completed in Brazil. Greenfields Exploration completed 8,427m of diamond and RC drilling.
In Colombia, exploration success continued at the Nuevo Chaquiro project, a joint venture with B2Gold (AGA 88.5%). During the quarter 5,400m of diamond drilling, in six holes was carried out with two drill rigs. AGA has been successful in further definition of a higher grade zone and is now focussed on its extensions. AGA is pleased to announce a maiden Inferred Resource estimate for Nuevo Chaquiro of 604Mt at an average grade of 0.65% copper, 0.32g/t gold, 4.38g/t silver and 116ppm molybdenum for a contained metal content of 3.95Mt copper, 6.13Moz gold, 85.2Moz silver and 70Kt molybdenum.
In Australia (WA), 15,309m of aircore drilling tested various Greenfields targets at the Tropicana JV (TJV). Aircore drilling at the Madras prospect has returned encouraging results and a ground geophysics survey is planned to better delineate targets ahead of RC/DDH drilling in Q4. In New South Wales, AGA has withdrawn from the Nyngan Earn-in and Joint Venture Project. Also in New South Wales, at the new Mullion Project (AGA 100%), stakeholder engagement has commenced in preparation for conducting on-ground exploration activities.
In Guinea, exploration work continued in Siguri Blocks 2 and 3 (AGA 85%) until 20 July after which work was suspended due to Ebola in the immediate region. On the Kounkoun trend (Block 3) 2,616m of RC drilling was completed to test the continuation of mineralisation between KK1 and KK2. All the assay results (4,443 results from 27 holes) were received and confirmed the continuity of mineralisation between KK1 and KK2. However, the gold grade is lower and the width of mineralisation is narrower away from KK1 and towards KK2.
At the Gueleni prospect (Block 2) and at Foulata North (Block 2) all outstanding assay results were received during the quarter with no significant intersections reported.
In Brazil site preparation and logistics continued for diamond drilling during the upcoming quarter at the Pe Quente Project, part of the Graben Joint Venture in Mato Grosso State. This drilling will test three priority targets generated by ground geophysics and supported by structural and geochemical evidence.
BROWNFIELDS EXPLORATION
A total of 102,440m of diamond and RC drilling was completed during the third quarter of 2014.
In South Africa, four deep surface drilling sites were in operation during the quarter, one on the Moab Khotsong and three at Mponeng (WUDLs). Diamond drilling continued at MZA10 and the hole is currently at 1,950m. This hole is targeted to provide value information in the lower reaches of the early gold portion of Project Zaaiplaats. The rehabilitation for UD51 has been completed. UD59 advanced well during the quarter and reached a depth of 3,172m in the Edenville Formation lava’s. Redrill at UD60 has advanced to 1,814m. The diamond rig has been erected at UD58A and the hole is currently being straightened and is at a depth of 876m compared to 291m in the previous quarter. Poor ground conditions are hampering the progress of the hole.
In Tanzania at Geita Gold Mine exploration focused on infill drilling programmes at Geita Hill West (77m RC), Nyankanga Cut 8 (140m) and the Star and Comet Cut2/3 gap (1,168m). Mineral Resource extension drilling continued at Star & Comet Deeps (1,888m). Assay results from infill drilling programmes undertaken in the previous quarter were received for Geita Hill West and Geita Hill East. In general, these intersections confirmed ore zones to be as modelled. Initial results were also obtained for the Star and Comet Cut/2/3 gap area.
In September a first pass mapping exercise was conducted around P30 area to improve the understanding of the geology and mineralisation, and assess the target for follow-up work. P30 is located along the supracrustal sequence (including BIF) to the west of Nyankanga/Kalondwa Hill. Grab samples from breccia within the folded BIF/chert ironstones and tuffaceous rocks returned significant values and the area has been subject to ASM activities.
In Guinea, at Siguiri Gold Mine, a total of 40 holes were completed with 3,327m during the third quarter of 2014, comprised of 2,385m RC infill drilling at Sokunu, and 942m AC drilled to sterilise the new return water dam site. No significant intersepts were obtained in the sterilisation drilling. Two RC drilling programmes were carrying out at Sokunu, one (540m) aimed to test below-pit continuation of mineralisation; the second (1,845m) was infill drilling focused on adding and upgrading the Mineral Resource on the south-western edge of the Sokunu Pit. Most assays have been returned and several holes from the south-western drilling returned positive results. Further drilling is required to complete the programme.
In Ghana, at Obuasi Gold Mine a total of 880m of underground drilling was completed from the above 50 Level 41S-294W site. The infill drilling program to increase confidence in portions of Block 9/Red Zone 6 currently classified as Inferred Mineral Resource has now been completed. At Iduapriem, drilling was completed in the areas to the north of Blocks 1 and 2 to test areas identified in recent field investigation and target generation work. The results from these traverses were disappointing with no conglomerates identified nor significant intercepts. A programme of 35 shallow (6m) auger holes were drilled at Block 1 for a preliminary assessment of the grade of the fill material in the pit with no assays returned to date. Block 3W mapping and grab sampling continued and defined a possible extension towards Block 4 for follow-up work. Pitting was completed on the Heap Leach Pad for size fraction analysis.
In the Democratic Republic of Congo at Kibali, an updated Mineral Resource for Gorumbwa showed 3.51Mt @ 3.54g/t for 0.4Moz (at 0.5g/t cut-off) within the $1000 pit shell, with 44% of the Mineral Resources being classified as Inferred. A Phase 3 drilling programme was initiated during the quarter and aims to convert 91% of this Inferred Mineral Resource to Indicated Mineral Resource. 9 DD and 25 RC holes were completed during the quarter. Drilling results to date show good overall correlation with models. Most of these are from holes below the old pit and up-plunge in the SW border of the old pit.
At KCD, four holes were completed on a 3000 Lode target over a 200m down-plunge gap on the NE border of the $1000 pit. This area was identified by geological interpretation of core and both pit and underground mapping as a possible extension of the high-grade 3104 Lode. Results are pending but visual indications of intense alteration and associated sulphide mineralisation generally support the modelled ore zones. A program of 3RC holes were drilled within the $1000 pit shell for bottle roll testwork at Mofu. Results are pending but the drilling confirmed the geological model. 20RC sterilisation holes were also completed at Mofu over the proposed waste dump area. Results are pending.
Regional work took place at several targets, comprising mapping, soil, pit and trench sampling. Trenching at Memekazi NE supports a model of two zones of mineralisation associated with moderate silica alteration. Significant intersections in trenches at Aindi Watsa indicate continuity of mineralisation over 200m strike, with a higher grade zone over 120m. Mineralisation is associated with a brecciated, locally silica altered, chert horizon with thin intercalated magnetite lenses. At Rhino-Agbarabo, trenching was completed at the Kombokolo SW and Rhino SE target with positive results. An historic Moto geotech hole close to the Kombokolo trench has been logged and sampled.
In the Republic of Mali at Sadiola, RC drilling commenced in August 2014 (2,524 m). This included 1,054m on oxide targets at FE4 South East and Voyager East, which returned disappointing results. The remaining 1,470m was drilled as part of initial testing for sulphide potential below the FE4 and FE3 pits, both of these programmes provided positive results and will be followed up. Further drilling (1,358m) was completed on the marginal stockpile SP12 to reduce risk.
More fieldwork was conducted by the Centre for Exploration Targeting (CET), aimed at defining the structural framework for mineralisation in FE3, FE4 and Tambali Pits. This work was then used in structural modelling and development of revised and extended
upside models to evaluate the potential for sulphide ore in these pits. Scoping studies are currently underway and will define potentially economic targets for further exploration.
In Colombia, drilling, Mineral Resource modelling, and infrastructure studies continued to support the Pre-Feasibility Study at the Gramalote Joint Venture. 2,295m were completed during the quarter. At La Colosa, drilling activities included 4,305m completed for Mineral Resource infill and extension. Site investigation, hydrology and geotechnical drilling programmes continued.
At Sunrise Dam in Australia, all work was focussed on Mineral Resource definition (infill) and extension for the underground mine. Diamond drilling targeted Vogue, GQ/MWS down-dip, Sunrise Shear Zone (SSZ) and Cosmo East domains. RC drilling was done in the Vogue/Dolly/Dolly Corridor/Southern Midway Shear (MWS) domains with numerous significant intercepts reported from both diamond and RC drilling. At Tropicana the planned 3D seismic survey to image the mineralised zone down dip of TGM was completed and data delivery is scheduled for the fourth quarter of the year. During the third quarter of 2014 follow-up AC along with a limited RC/diamond drilling campaign at the Tumbleweed prospect, 15km north of Tropicana Gold Mine was completed. AC drilling was also completed at the Maple Leaf prospect. A diamond hole was drilled to test down-dip extents of mineralisation at Voodoo Child.
Detailed information on the exploration activities and studies both for brownfields and greenfields is available on the AngloGold Ashanti website (www.anglogoldashanti.com).
OUTLOOK
Fourth Quarter
Production guidance is estimated to be between 1,100kozs to 1,140kozs at total cash costs of $800/oz to $820/oz, assuming average exchange rates against the US dollar of 11.10 (Rand), 2.37 ( Brazil Real), 0.87 (Aus$) and 8.87 ( Argentina Peso), with fuel at $95/bl.
This outlook for the fourth quarter includes tapering production from Obuasi as well as completion of the retrenchment programme at the Obuasi mine, which is expected by year-end. The costs of retrenchment will impact both earnings and cash flows, but will be excluded from the calculation of all-in sustaining costs.
As in prior years, the fourth quarter earnings will be distorted by year-end accounting adjustments such as reassessment of useful lives and carry values of mining tangible assets, inventory stockpile and investments, reset of environmental rehabilitation provisions, redundancy provisions, direct and indirect and deferred taxation provisions.
Full-year
Production guidance for the year is now between 4.35Moz to 4.45Moz, toward the top end of our initial guidance of 4.2Moz to 4.5Moz after taking into account consistently strong production performances across the portfolio, despite the sale of the Navachab mine, the tapering of production at Obuasi and losses following the earthquake in the third quarter.
Total cash costs are now anticipated to be $775/oz to $810/oz, which factors in the average exchange rates against the US dollar that were stronger than initially anticipated at the beginning of the year, of 10.80 (Rand), 2.31 ( Brazil Real), 0.91 (Aus$) and 8.21 ( Argentina Peso), with fuel at $103/bl.
For the year, AISC are still within the original guidance of $1,025/oz to $1,075/oz, taking into account reduced overheads and capital expenditures.
Capital expenditure for the full year is now expected to be $1.25bn - $1.30bn, initially forecast at $1.35bn - $1.45bn. Corporate costs are now forecast at approximately $100m for the year, compared with the initial guidance of $120m - $140m, and Expenses exploration and study costs are forecast at $155m to $165m, from initial guidance of $150m - $175m.
Other known or unpredictable factors could also have material adverse effects on our future results. Please refer to the Risk Factors section in AngloGold Ashanti’s Form 20-F for the year ended 31 December 2013 that was filed with the United States Securities and Exchange Commission (“SEC”) on 14 April 2014 and available on the SEC’s homepage at http://www.sec.gov.
Independent auditor’s review report on the Condensed Consolidated Financial Information for the quarter and nine months ended 30 September 2014 to the Shareholders of AngloGold Ashanti Limited
We have reviewed the condensed consolidated financial statements of AngloGold Ashanti Limited (the company) contained in the accompanying quarterly report on pages 12 to 26, which comprise the accompanying condensed consolidated statement of financial position as at 30 September 2014, the condensed consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the quarter and nine months then ended, and selected explanatory notes.
Directors’ Responsibility for the Condensed Consolidated Financial Statements
The directors are responsible for the preparation and presentation of these condensed consolidated financial statements in
accordance with the International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting as issued by the
International Accounting Standards Board (IASB), the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council , and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of condensed consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on these interim financial statements based on our review. We conducted our
review in accordance with International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. This standard requires us to conclude whether anything has come to our attention that causes us to believe that the interim financial statements are not prepared in all material respects in accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements.
A review of interim financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform procedures, primarily consisting of making enquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluating the evidence obtained.
The procedures performed in a review are substantially less than and differ in nature from those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated financial statements of the company for the quarter and nine months ended 30 September 2014 are not prepared,
in all material respects, in accordance with International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting as
issued by the IASB, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.
Ernst & Young Inc. Director – Roger Hillen Registered Auditor Chartered Accountant (SA) 102 Rivonia Road, Sandton
Johannesburg, South Africa 30 October 2014
Group
income statement
Quarter Quarter Quarter Nine months Nine months
ended ended ended ended ended
September June September September September
2014 2014 2013 2014 2013
US Dollar million Notes Reviewed Reviewed Reviewed Reviewed Reviewed
Revenue 2 1,337 1,358 1,415 4,054 4,234
Gold income 2 1,295 1,321 1,374 3,940 4,079
Cost of sales 3 (1,052) (1,064) (1,064) (3,130) (3,104)
Gain (loss) on non-hedge derivatives and other
commodity contracts 30 (5) (34) 10 66
Gross profit 273 252 276 820 1,041 Corporate administration, marketing and other expenses (24) (20) (42) (68) (165)
Exploration and evaluation costs (37) (33) (55) (99) (214)
Other operating expenses 4 (9) (7) (7) (21) (18)
Special items 5 (54) (17) (92) (78) (3,319) Operating profit (loss) 149 175 80 554 (2,675) Dividends received 2 - - - - 5
Interest received 2 6 6 8 17 24
Exchange gain (loss) 4 (8) 10 (11) 11
Finance costs and unwinding of obligations 6 (69) (71) (89) (211) (222)
Fair value adjustment on $1.25bn bonds 20 (31) (46) (80) (46)
Fair value adjustment on option component of convertible bonds - - - - 9
Fair value adjustment on mandatory convertible bonds - - 44 - 356
Share of associates and joint ventures' profit (loss) 7 19 (85) 25 (47) (166)
Profit (loss) before taxation 129 (14) 32 222 (2,704) Taxation 8 (85) (60) (38) (206) 759
Profit (loss) for the period 44 (74) (6) 16 (1,945) Allocated as follows: Equity shareholders 41 (80) 1 - (1,925) Non-controlling interests 3 6 (7) 16 (20)
44 (74) (6) 16 (1,945) Basic earnings (loss) per ordinary share (cents) (1) 10 (20) 0 0 (496)
Diluted earnings (loss) per ordinary share (cents) (2) 10 (20) (9) 0 (556)
(1)
Calculated on the basic weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
(2)
Calculated on the diluted weighted average number of ordinary shares.
The reviewed financial statements for the quarter and nine months ended 30 September 2014 have been prepared by the corporate accounting staff of AngloGold Ashanti Limited headed by Mr John Edwin Staples (BCompt (Hons); CGMA), the Group's Chief Accounting Officer. This process was supervised by Ms Kandimathie Christine Ramon (CA (SA)), the Group's Chief Financial Officer and Mr Srinivasan Venkatakrishnan (BCom; ACA (ICAI)), the Group's Chief Executive Officer. The financial statements for the quarter and nine months ended 30 September 2014 were reviewed, but not audited, by the Group's statutory auditors, Ernst & Young Inc.
Group
statement of comprehensive income
Quarter Quarter Quarter Nine months Nine months
ended ended ended ended ended
September June September September September
2014 2014 2013 2014 2013
US Dollar million Reviewed Reviewed Reviewed Reviewed Reviewed
Profit (loss) for the period 44 (74) (6) 16 (1,945)
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign
operations (118) (8) (8) (134) (348)
Share of associates and joint ventures' other
comprehensive income (1) - - -
-Net (loss) gain on available-for-sale financial assets (10) - 3 (1) (23) Release on impairment of available-for-sale
financial assets - 1 4 1 29
Release on disposal of available-for-sale
financial assets - - (1) - (1)
Deferred taxation thereon 4 - - - 2
(6)
1 6 - 7
Items that will not be reclassified subsequently to profit or loss:
Actuarial (gain) loss recognised (7) 6 (13) 9 17 Deferred taxation thereon 2 (2) 3 (2) (5)
(5)
4 (10) 7 12
Other comprehensive loss for the
period, net of tax (130) (3) (12) (127) (329)
Total comprehensive loss for the
period, net of tax (86) (77) (18) (111) (2,274)
Allocated as follows:
Equity shareholders (89) (83) (11) (127) (2,254)
Non-controlling interests 3 6 (7) 16 (20)
(86)
(77) (18) (111) (2,274)
Group
statement of financial position
As at As at As at As at
September June December September
2014 2014 2013 2013
US Dollar million Notes Reviewed Reviewed Audited Reviewed
ASSETS
Non-current assets
Tangible assets 4,839 4,955 4,815 4,800
Intangible assets 247 270 267 288
Investments in associates and joint ventures 1,373 1,348 1,327 1,233 Other investments 127 144 131 134
Inventories 606 602 586 602
Trade and other receivables 30 23 29 29
Deferred taxation 160 187 177 541
Cash restricted for use 38 36 31 30
Other non-current assets 47 56 41 7
7,467 7,621 7,404 7,664 Current assets Other investments - - 1
-Inventories 959 1,002 1,053 1,064 Trade and other receivables 312 356 369 425
Cash restricted for use 15 18 46 36
Cash and cash equivalents 557 604 648 786
1,843 1,980 2,117 2,311 Non-current assets held for sale 14 - - 153 150
1,843 1,980 2,270 2,461 TOTAL ASSETS 9,310 9,601 9,674 10,125 EQUITY AND LIABILITIES Share capital and premium 11 7,036 7,032 7,006 6,988 Accumulated losses and other reserves (4,051) (3,969) (3,927) (3,555) Shareholders' equity 2,985 3,063 3,079 3,433 Non-controlling interests 25 38 28 (22)
Total equity 3,010 3,101 3,107 3,411 Non-current liabilities Borrowings 3,521 3,619 3,633 3,583 Environmental rehabilitation and other provisions 1,022 1,060 963 1,057 Provision for pension and post-retirement benefits 142 150 152 179
Trade, other payables and deferred income 13 14 4 2
Deferred taxation 597 607 579 593
5,295 5,450 5,331 5,414 Current liabilities Borrowings 159 187 258 326
Trade, other payables and deferred income 751 777 820 835
Bank overdraft 13 4 20 25
Taxation 82 82 81 54
1,005 1,050 1,179 1,240 Non-current liabilities held for sale 14 - - 57 60
1,005
1,050 1,236 1,300
Total liabilities 6,300 6,500 6,567 6,714
